Now that the U.S. media have finally recovered at least some of their critical faculties when it comes to the war in Iraq, we are being deluged with stories of corporate profiteers who are making billions supplying goods and services to the U.S. military.

That companies make money from war is not news. Ever since Napoleon, armies have organized civilian contractors to supply and support the troops.

Smart operators knew that bloodshed spelled bonanza. They cranked up the munitions factories, and signed contracts for delivery of uniforms, food rations and transport.

What the recent stories reveal, however, is that companies have moved well beyond their traditional position at the tail end of the army, and are now selling their services uncomfortably close to the fighting end, which in military parlance is known as the tooth. They are guarding military bases, training front-line troops and operating surveillance drones in combat zones.

The presence of civilian contractors at the front raises troubling legal and moral questions, not just about the status of the service providers (are they combatants? non-combatants? illegal combatants?), but also about who has the right to wield deadly force.

What used to be the preserve of nation-states is now being opened up to the private sector.

In a new book called Corporate Warriors: The Rise of the Privatized Military Industry, P..W. Singer estimates that private provision of military services is now a $100-billion (U.S.) industry worldwide.

Lest anyone think that is a problem for the United States alone, think again. Canada, along with many other countries, has begun to privatize many functions once reserved for those in uniform. We have not progressed as far down the road as has the United States, but we are heading in that direction.

Under what is termed "alternative service delivery," the Department of National Defence has hired companies to operate and maintain the northern radar sites of what used to be known as the DEW Line (Atco Frontec Corp.), run the Canadian Forces Base at Goose Bay (Seco), train pilots (Bombardier) and run five Canadian bases in Bosnia-Herzegovina (Atco!

Frontec).

Former Canadian soldiers also show up on the supply side of this equation, working for the companies offering military services to various governments, humanitarian agencies and private corporations. There have been reports that former members of Canada's special forces, JTF2, are now working as private bodyguards in Iraq.

With hindsight, it is easy to see how we have arrived at this point.

Following the end of the Cold War, state militaries slimmed down. There are seven million fewer soldiers employed directly by governments today than there were in 1989. Those former soldiers didn't just fade away. Some reconstituted themselves as corporations, or sold their skills to existing companies such as Vinnell Corp., which trains the Saudi National Guard and has a new contract to train the Iraqi army; Dyncorp, which provides security to U.S. diplomats in Israel and has a contract to train the Iraqi police force, and MPRI, which equipped and trained the Croatian army. Those U.S. companies have their equivalents around the world.

They call themselves private military companies, but the ones who provide combat services are really just modern mercenaries with corporate titles and expense accounts, a spiffed-up version of the dogs of war.

The companies argue, with some justification, that they fill a need.

National governments are under budget constraints to limit the size of their armies. It is easier and sometimes cheaper to hire a private military company to do the work. The companies also point out that they are willing to take on work that national governments shun. Their industry group, the International Peace Operations Association, has proposed mounting a peacekeeping mission in the Congo. A London-based group called Global Security Partnership, whose principals include a Canadian, wants to deploy troops on behalf of the United Nations.

There are major problems with this approach. First, there are no international regulations governing this burgeoning business. Binding rules have to be put in place before governments officially cede their monopoly on coercive force. Some private military companies recognize the problem and are calling for regulations themselves. Claims that privatization saves governments money should also be scrutinized more carefully. Are the reasons governments resort to private military contractors financial, or political?

Finally, a way has to be found to ensure that private companies will respect the laws protecting human rights that were written with states in mind.

Paul Martin has promised a defence review once he takes over as prime minister. He should ensure that the tough questions about defence privatization are addressed.

Madelaine Drohan is the author of Making a Killing: How and Why Corporations Use Armed Force to do Business.